Check, Please

Thomas Keller is one of the world’s most respected chefs, a best-selling cookbook author, and the owner of four successful high-end restaurants. Until a few weeks ago, he seemed a model of entrepreneurial rigor. Then news broke that Keller had decided to abolish tipping at his New York restaurant Per Se, starting this month, and replace it with the kind of fixed service charge that’s common in Europe. Now some people are calling him un-American for scrapping a system in which waiters are rewarded on the basis of their individual performance.

Restaurant workers in the United States make more than twenty-five billion dollars a year in tips, so it’s natural that people think of the custom as quintessentially American. But it wasn’t always. Tipping didn’t take hold here until after the Civil War, and even as it spread it met with fervent public opposition from people who considered it a toxic vestige of Old World patronage. Anti-tipping associations were formed; newspapers—including the Times—regularly denounced the custom. Tipping, the activists held, fostered a masterservant relationship that was ill suited to a nation in which people were meant to be social equals. William R. Scott, in his 1916 polemic “The Itching Palm,” described the tip as the price that “one American is willing to pay to induce another American to acknowledge inferiority”; Gunton’s Magazine labelled the custom “offensively un-American,” arguing that workers here should seek honest wages “instead of fawning for favors.” The anti-tipping campaigns were so effective that six states actually banned the practice.

The opponents of tipping got some important things right. They saw that tipping was an aberration in a freemarket economy, and that tips had a lot in common with gifts. They also understood that economics alone could not explain why customers were willing to tip. What they missed was that the very things they thought made tipping un-American—the waiters’ need to cultivate a relationship with the customer, and their reliance on that customer’s largesse—were exactly what would eventually make tipping a powerful social norm.

People tip even though they don’t have to. Since they tip after they’ve been served, they’re not buying good treatment in advance. Nor are they just buttering up their regular waitresses—studies show that people tip about as well at out-of-town restaurants as they do at their local Bennigan’s. Americans are paying money that they do not have to pay, then, while receiving no obvious benefit as a result.

So why tip? When people are asked, they usually say that they tip to reward good service. Yet how much people tip is determined mainly by how much their meal cost, and the cost of a meal at a given restaurant is usually only tenuously connected to the work required to serve it. (It’s just as easy to open a hundred-dollar bottle of wine as it is to open a thirty-dollar bottle.) In an extensive survey of tipping studies, Michael Lynn, a professor at Cornell, found only a weak correlation between the quality of service that people report receiving and the tips they give. On average, exceptional service raised tips by about 1.5 per cent, which, Lynn argues, is too small for waiters to notice. And countries where there’s no tipping—like Australia and Japan—don’t have worse service than the United States.

It’s instructive to consider the sort of things that tippers actually respond to. In one study, a waitress received fifty per cent more in tips when she introduced herself by name than when she didn’t. In another, waiters sharply increased their tips by giving each member of a dining party a piece of candy and then, seemingly spontaneously, offering each person a second piece, too. Squatting by the table instead of standing, writing “Thank you” on the back of checks, and touching customers on their shoulders all measurably improved tips. And waitresses at an upscale restaurant who simply put flowers in their hair boosted their tips by seventeen per cent.

These tricks may seem cutesy, but they help personalize the relationship between the customer and the server, which tells you something important about the nature of tipping. The practice really belongs to what sociologists call a gift economy rather than to a market one. The free market, at least in theory, is all about impersonal exchange—as long as you have goods to sell and I have money to buy them, we can make a deal, regardless of how we feel about each other. But, when it comes to tipping, who we are and how we feel matter a lot, because a tip is essentially a gift, and we give better gifts to people we like than to people we don’t. Tippers aren’t trying to drive hard bargains or maximize their economic interests; they’re trying to demonstrate their status and to reciprocate what they see as good behavior.

This is, on both sides, a more uncertain process than a simple service charge would be. But that uncertainty—that freedom to exercise discretion, to leave as little or as much as you wish—is why tipping has flourished as a social institution. (In the same spirit, Americans prefer giving charity privately rather than through their government.) Diners—eighty per cent of whom say that they prefer tipping to a set service charge—like the power that the ability to tip gives them. Waiters like tipping because it gives them the chance to distinguish themselves from the crowd and to score an occasional windfall. Tipping, curiously, has gone from being the antithesis of individualism to its apotheosis. That’s not because tipping has changed. It’s because America has.

James Surowiecki is the author of “The Wisdom of Crowds” and writes about economics, business, and finance for the magazine.